Molecular events during embryogenesis in Xenopus laevis are being studied with the aid of gene sequence isolated from a subtracted cDNA library. This library contains copies of only those RNAs that are absent from the oocyte and are accumulated in the embryo between blastula and midgastrula stages; these are named DG RNAs. The analysis of a selected group of about 30 DG cRNA had resulted in the following findings. Three cDNA clones representing some of the most abundant embryonic RNAs have been identified by sequence analysis and comparison as encoding epidermal cytokeratins. Two of the genes represent type I keratin genes, the third is a type II keratin gene. The two type I genes, named DG70 and DG81, are related but quite distinct sequences. They have different developmental profiles in that DG70 is restricted to an earlier stage than DG81. The genomic DNA encoding DG81 has been isolated and sequenced. Its intron/exon arrangement is closely similar to that of a recently analyzed human type I keratin gene. Several DG RNAs have been localized in the embryo. The keratin genes DG70, DG76 and DG81 are localized in the ectoderm and later the epidermis. DG42, an RNA that is abundant for just a short period of gastrula and neurula development, and one other RNA have been localized to the endoderm. These cDNA clones, together with an Alpha-actin clone, have been used to study the significance of cell interactions in early development for the requirement of cell interactions for differentiation of the mesoderm.